114-0339/02 – Behavioral Economics (BE)

Gurantor department	Department of Economics	Credits	5
Subject guarantor	doc. Ing. Aleš Melecký, Ph.D.	Subject version guarantor	doc. Ing. Aleš Melecký, Ph.D.
Study level	undergraduate or graduate	Requirement	Compulsory
Year	1	Semester	summer
		Study language	Czech
Year of introduction	2019/2020	Year of cancellation
Intended for the faculties	EKF	Intended for study types	Follow-up Master

Instruction secured by
Login	Name	Tuitor	Teacher giving lectures
HLA31	Ing. Karel Hlaváček, Ph.D.
KON0310	Ing. Vojtěch Koňařík
MEL044	doc. Ing. Aleš Melecký, Ph.D.
SUL080	Ing. Monika Šulganová, Ph.D.

Extent of instruction for forms of study
Form of study	Way of compl.	Extent
Full-time	Credit and Examination	2+2

Subject aims expressed by acquired skills and competences

Characterize the nature of behavioral economics and explain the basic concepts in this field. Describe the differences between classical and behavioral economics and criticism of rational decision making. Introduce basic behavioral heuristics and their practical applications. Introduce the penetration of behavioral economics into other areas such as behavioral finance and marketing.

Teaching methods

Lectures
Seminars

Summary

Economic theory perceives in its models a human as a rational individual maximizing its utility. Such an individual is only considered to be the optimal theoretical concept, and the actual behavior of a person may sometimes appear to be seemingly irrational. In this course, we abandon the assumptions of traditional models and focus on both, consumer behavioral theory and business theory, but also on investment theory and finance from a behavioral perspective. The experimental economics overcome the barrier of pure rationality and selfishness, and along with behavioral economics it allows economists to observe human behavior.

Compulsory literature:

ARIELY Dan a Jeff KREISLER. Peníze a zdravý selský rozum. Praha: Práh, 2019. ISBN 978-80-7252-796-0. KAHNEMAN, Daniel, Olivier SIBONY a Cass R. SUNSTEIN. Šum. Brno: Jan Melvil, 2021. 408 s. ISBN 978-80-7555-148-1 O'SULLIVAN, Arthur. Behavioral Economics. Oxford: Oxford University Press, 2022. 472 s. ISBN 978-0197515921.

Recommended literature:

TALEB, Nassim N. Nasadit vlastní kůži. Praha: Paseka, 2019. 324 s. ISBN 978-80-7637-025-8. THALER, Richard B. Neočekávané chování. Praha: Argo/Dokořán, 2017. 380 s. ISBN 978-80-257-2121-6. THALER, Richard B. a Cass R. SUNSTEIN. Nudge: The Final Edition. New York: Penguin Books, 2021. 384 s. ISBN 978-0143137009.

Way of continuous check of knowledge in the course of semester

Project presentation + credit test - max. 30 points, min. 18 b. Exam - max. 70 points, min. 21 b. The graduation conditions for students with an individual plan are the same. Compulsory participation in exercises is not required.

E-learning

Other requirements

There are no additional requirements for the student.

Prerequisities

Subject has no prerequisities.

Co-requisities

Subject has no co-requisities.

Subject syllabus:

1) Introduction to Behavioural Economics • Antecedents of behavioural economics • Methodology of economics • Theoretical approaches in behavioural economics • Experimental method in economics • Examples of behavioural evidence 2) Behavioural Decision under Risk and Uncertainty • Classical decision theory • Subjective expected utility theory • Violations of expected utility theory 3) Behavioural Models of Decision Making • Rank dependent utility theory • Prospect theory • Human behaviour for extreme probability events • Risk preferences and time preferences 4) Applications of Behavioural Decision Theory • Endowment effect and exchange asymmetries • Myopic loss aversion • Goals and contracts as reference points • Moral hazard, loss aversion, and optimal contracts 5) Present Bias and Time-inconsistency • Evidence on temporal human choice • Behavioural models of time discounting • Applications of present-biased preferences 6) Behavioural Game Theory • Evidence of strategic human choice • Models of behavioural game theory 7) Behavioural models of learning • Evolutionary game theory • Models of learning • Stochastic social dynamics 8) Emotions • Emotions of human behaviour • Interactions between emotions and cognition 9) Bounded Rationality • Judgment heuristics • The law of small numbers • Conjunction fallacy • The availability heuristics 10) Behavioural Finance • Neoclassical theory of capital markets and its limitations • Behavioural perspective on investors` behaviour • Speculative bubbles as a characteristics of market anomalies 11) Social Preferences and Labour Economics • Evidence on social behaviour • Models of fairness and reciprocity • Applications in labour economics 12) Economics of information • Moral hazard and incentive contracts • Adverse selection and signaling • Economics and psychology 13) Altruism, reciprocity and peer effect 14) Practical applications of behavioral economics

Conditions for subject completion

Full-time form (validity from: 2019/2020 Winter semester)

Task name	Type of task	Max. number of points (act. for subtasks)	Min. number of points	Max. počet pokusů
Credit and Examination	Credit and Examination	100 (100)	51
Credit	Credit	30	18
Examination	Examination	70	21	3

Mandatory attendence participation: not defined

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Conditions for subject completion and attendance at the exercises within ISP: The graduation conditions for students with an individual plan are the same. Compulsory participation in exercises is not required.

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Occurrence in study plans

Academic year	Programme	Branch/spec.	Zaměření	Form	Study language	Tut. centre	Year	Type of duty
2024/2025	(N0311A050012) Applied economics	(S01) International Economic Relations		P	Czech	Ostrava		Choice-compulsory type B	study plan
2024/2025	(N0311A050012) Applied economics	(S02) Economic Development	APE	P	Czech	Ostrava	1	Compulsory	study plan
2024/2025	(N0414A050001) Marketing and Business			P	Czech	Ostrava	1	Choice-compulsory type B	study plan
2024/2025	(N0488A050004) Finance and Accounting	(S01) Finance		P	Czech	Ostrava	1	Choice-compulsory type B	study plan
2024/2025	(N0488A050004) Finance and Accounting	(S02) Accounting and Taxes		P	Czech	Ostrava	2	Choice-compulsory type B	study plan
2024/2025	(N0311EKF023) Economics		HPO	P	Czech	Ostrava	1	Compulsory	study plan
2023/2024	(N0311A050012) Applied economics	(S02) Economic Development	APE	P	Czech	Ostrava	1	Compulsory	study plan
2023/2024	(N0311A050012) Applied economics	(S01) International Economic Relations		P	Czech	Ostrava		Choice-compulsory type B	study plan
2023/2024	(N0488A050004) Finance and Accounting	(S01) Finance		P	Czech	Ostrava	1	Choice-compulsory type B	study plan
2023/2024	(N0488A050004) Finance and Accounting	(S02) Accounting and Taxes		P	Czech	Ostrava	2	Choice-compulsory type B	study plan
2023/2024	(N0414A050001) Marketing and Business			P	Czech	Ostrava	1	Choice-compulsory type B	study plan
2023/2024	(N0311EKF023) Economics		HPO	P	Czech	Ostrava	1	Compulsory	study plan
2022/2023	(N0311A050012) Applied economics	(S02) Economic Development	APE	P	Czech	Ostrava	1	Compulsory	study plan
2022/2023	(N0311A050012) Applied economics	(S01) International Economic Relations		P	Czech	Ostrava		Choice-compulsory type B	study plan
2022/2023	(N0414A050001) Marketing and Business			P	Czech	Ostrava	1	Choice-compulsory type B	study plan
2022/2023	(N0488A050004) Finance and Accounting	(S01) Finance		P	Czech	Ostrava	1	Choice-compulsory type B	study plan
2022/2023	(N0488A050004) Finance and Accounting	(S02) Accounting and Taxes		P	Czech	Ostrava	2	Choice-compulsory type B	study plan
2021/2022	(N0311A050012) Applied economics	(S02) Economic Development	APE	P	Czech	Ostrava	1	Compulsory	study plan
2021/2022	(N0311A050012) Applied economics	(S01) International Economic Relations		P	Czech	Ostrava		Choice-compulsory type B	study plan
2021/2022	(N0488A050004) Finance and Accounting	(S01) Finance		P	Czech	Ostrava	1	Choice-compulsory type B	study plan
2021/2022	(N0488A050004) Finance and Accounting	(S02) Accounting and Taxes		P	Czech	Ostrava	2	Choice-compulsory type B	study plan
2021/2022	(N0414A050001) Marketing and Business			P	Czech	Ostrava	1	Choice-compulsory type B	study plan
2020/2021	(N0311A050012) Applied economics	(S01) International Economic Relations		P	Czech	Ostrava		Choice-compulsory type B	study plan
2020/2021	(N0311A050012) Applied economics	(S02) Economic Development	APE	P	Czech	Ostrava	1	Compulsory	study plan
2020/2021	(N0488A050004) Finance and Accounting	(S01) Finance		P	Czech	Ostrava	1	Choice-compulsory type B	study plan
2020/2021	(N0488A050004) Finance and Accounting	(S02) Accounting and Taxes		P	Czech	Ostrava	2	Choice-compulsory type B	study plan
2020/2021	(N0414A050001) Marketing and Business			P	Czech	Ostrava	1	Choice-compulsory type B	study plan
2019/2020	(N0311A050012) Applied economics	(S01) International Economic Relations		P	Czech	Ostrava		Choice-compulsory type B	study plan
2019/2020	(N0311A050012) Applied economics	(S02) Economic Development	APE	P	Czech	Ostrava	1	Compulsory	study plan
2019/2020	(N0488A050004) Finance and Accounting	(S01) Finance		P	Czech	Ostrava	1	Choice-compulsory type B	study plan
2019/2020	(N0488A050004) Finance and Accounting	(S02) Accounting and Taxes		P	Czech	Ostrava	2	Choice-compulsory type B	study plan

Occurrence in special blocks

Block name	Academic year	Form of study	Study language	Year	W	S	Type of block	Block owner

Assessment of instruction